Examiner’s Report

Unit Title: Finance for Managers

Unit Code: 4UFM

RQF Level: Level 4

Session: December 2018

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Comments on Learning Outcome and Assessment Criteria Performance

Learning Outcomes & Assessment Criteria Comments

1. Explain the purpose of financial and management
accounting.
AC’s 1.1, 1.2 and 1.3.
1.1 Understand the roles of financial and management
accounting.
1.2 Apply accounting principles, processes, and concepts
to financial and management accounting data.
1.3 Assess the needs of business stakeholders in relation
to financial and management accounting information.
Candidates demonstrated a reasonable understanding
of financial and management accounting techniques. It
was evident, that candidates had a good understanding
of the accounting principles and concepts however,
their application of these in practical situations was
limited.

2. Interpret financial statements to review the Candidates showed limited understanding of financial
performance of business organisations and report to statements. In many cases, they were able to list ‘pre-
stakeholders. learnt’ information but unable to apply theory to
AC’s 2.1, 2.2 and 2.3. practice.
2.1 Assess the contents of financial statements to
review the performance of business organisations.
2.2 Calculate financial ratios to assess the financial
performance of a business organisation.
2.3 Make justified recommendations for business
improvements based on the results of financial analysis.

3. Prepare cash flow forecasts and financial budgets to
aid management decision making.
AC’s 3.1, 3.2 and 3.3.
3.1 Prepare cash flow forecasts for internal
management control.
3.2 Prepare organisational budgets to aid management
decision making.
3.3 Evaluate completed cash flow forecasts and financial
budgets to make informed business decisions.
Candidates struggled to differentiate between cash flow
and profit. There was a very limited understanding
shown of the topics in this Learning Outcome.
The cash flow forecast question was the least popular of
the three optional questions. However, the candidates
who did attempt the question generally scored very
well.

4. Demonstrate the use of costing and pricing methods Written work relating to break-even advantages and
to contribute to business decision making. disadvantages varied in quality. Many candidates
AC’s 4.1, 4.2 and 4.3. confused the two and struggled to differentiate
4.1 Explain costing and pricing methods used to make between assumptions and disadvantages.
business decisions.
4.2 Apply contribution and break-even calculations and
analysis to make effective business decisions.
4.3 Assess the implications of using different costing
methods.

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Question 21
Describe FOUR main budgets that a business organisation may prepare.

Learning Outcome
• Learning Outcome 3

1. Comments on candidates’ performance

Generally, well attempted with most candidates identifying realistic budgets. A number of candidates demonstrated
good understanding of the budget purposes. A small minority of candidates listed final accounts.

2. Recommendations
Candidates need to ensure that they are focusing on the command verb in the question and are providing sufficient
development. Candidates need to be reminded to read the question carefully and complete all parts of the question.

3. Quick Tips
Ensure you read the question carefully and provide a clear definition for any terms identified.

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Question 22
Explain FOUR applications of marginal costing.

Learning Outcome
• Learning Outcome 4

1. Comments on candidates’ performance

This question was poorly answered overall, and a significant number of candidates omitted the question.
Many candidates failed to understand the meaning of ‘applications’ and therefore scored zero marks. It was difficult
to ascertain when candidates understood the concepts involved or whether the work had been learned by rote.

2. Recommendations
Candidates need to ensure all key terms have been learnt. Practical business examples would demonstrate candidate
understanding and allow the candidates to consider the usefulness of the methods.

3. Quick Tips
Learn all key terms and illustrate explanations with practical business examples.

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Question 23
Discuss the main advantages and disadvantages of a business organisation using break-even analysis.

Learning Outcome
• Learning Outcome 4

1. Comments on candidates’ performance

Responses to this question were mixed with many candidates scoring 5 or more marks. Candidates tended to use a
point by point approach with little development. Many candidates made lists of advantages and disadvantages,
however, it was apparent that in a number of cases, the candidates were unsure which was which. Several candidates
listed assumptions of break-even analysis however, they failed to show sufficient understanding of how these
assumptions were disadvantages of using the analysis.

2. Recommendations
Candidates need to ensure that they focus on the question set and see that their answer meets the command verb.
Candidates should be advised not to list but to write in continuous prose.

3. Quick Tips
Write in continuous prose rather than make a list of points without development.

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Question 24
Discuss how accounting principles and concepts apply to financial and management data.

Learning Outcome
• Learning Outcome 1

1. Comments on candidates’ performance

The most popular of the 25-mark questions. A common approach to this question was to identify and carefully explain
what was meant by each of the accounting concepts and principles. The best answers provided practical examples of
how the concepts and principles were used. This clearly demonstrated understanding and applied theory to practice.
A small number of candidates misunderstood what was required and prepared essays about financial accounting and
management accounting or stakeholders. Overall however, the majority of candidates gained good marks for this
question.

2. Recommendations
Candidates need to make sure that they have a good understanding of key concepts and that they can provide
developed answers as well as identifying key points.

3. Quick Tips
Ensure key points are developed.

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Question 25
Ben is planning to open Claret and Blue Retail Store on 1 July 2018.
He plans to use $10 000 of his own savings and a bank loan of $12 000. These will be paid into the business bank
account on 1 July 2018.

Prepare a cash flow forecast for the three months ending September 2018.

Learning Outcome
• Learning Outcome 3

1. Comments on candidates’ performance

This was the least popular question in Section C. However, it tended to be effectively completed by many who
addressed the question with a large number of those candidates scoring full marks. Those candidates who were not
as well practiced tended to confuse units and currency amounts for sales and purchases. Candidates need to be
reminded to carefully read the question.

2. Recommendations
Ensure candidates have extensive practice completing numerical questions.

3. Quick Tips
Practice a range of numerical questions.

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Question 26
Discuss the content of annual accounts for private limited and public limited companies.

Learning Outcome
• Learning Outcome 2

1. Comments on candidates’ performance

This question proved a challenge to many candidates. In many cases, public companies seemed to mean the public
sector and government. Those candidates who ‘explained and discussed’ tended to do so at length but did not
necessarily consider annual accounts. Many candidates included general legal and organisational points about
companies but failed to address the question set.
Many of the responses were repetitive and sometimes contradictory. A significant number of candidates failed to
differentiate between private and public limited companies.
Overall, it was rare to see full depth and breadth and it was rare to see candidates gain more than half marks.

2. Recommendations
Candidates need to be reminded to read the question carefully and complete all parts of the question.

3. Quick Tips
Ensure you read the question carefully and include both parts, e.g. private and public limited companies.